Wang2001 PDF

Transparency International and Corruption as an Issue of Global Governance
Author(s): Hongying Wang and James N. Rosenau

Source: Global Governance, Vol. 7, No. 1 (Jan.–Mar. 2001), pp. 25-49
Published by: Lynne Rienner Publishers
Stable URL: http://www.jstor.org/stable/27800285
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Global Governance 7 (2001), 25-49
Transparency International
and Corruption as an Issue of
Global Governance
_ /2E\ _
Hongying Wang and James N. Rosenau
The globalization of economies, politics, and culture has broken

down traditional barriers of governance. A growing number of
issues that were formerly the exclusive responsibility and pre
rogative of national or regional governments are increasingly subject to
global governance. For us, the global governance of an issue has two
dimensions: high sensitivity to the issue on a global scale and, at least,
rudimentary global norms that focus on the issue. Environment, human
rights, poverty, population, and international financial flows are just a
few examples that come to mind.
But how does an issue become a concern of global governance?
We hope to shed light on this question by probing the emergence of
corruption as a global issue. Our empirical focus is on the role of
Transparency International (TI), a transnational nongovernmental or
ganization (NGO) devoted to fighting corruption. We hope this study
will facilitate understanding of the role played by idea and organiza
tional entrepreneurs in setting the global agenda and creating global
norms.
In the first part of the article we highlight the rise of corruption as

an issue of global governance. We go on in the second part to examine
some structural changes that have prepared the ground for this devel
opment. In the next two parts, we focus on TI as an agent of change
and compare TI with other transnational organizations working in the
realm of global governance. Finally, we conclude with some words of
empirical and theoretical caution.
Emerging Global Governance of Corruption
Corruption is not easily defined. Some observers, persuaded that defin

ing corruption presents difficult and complex challenges, undertake ex
tensive definitional efforts.1 Others assume that its meaning is widely
understood and make no attempt to specify its component dimensions,
25
26 Corruption as an Issue of Global Governance
as if these are so self-evident or overlapping that there is no need to

draw clear-cut lines among them. Most analysts emphasize that cor
ruption involves public officials, but some conceive of corrupt trans
actions occurring between corrupters and corruptees in the private sec
tor. For our purposes here, however, we confine the analysis to the
notion that corruption is the collaboration between public officials and
private actors for private financial gains in contravention of the pub
lic's interest. The scale and level of corruption ranges widely, from
small bribes to low-level bureaucrats (petty corruption) to distortions
of large procurements and major policy decisions (grand corruption).2
Neither corruption nor efforts to contest it are new. Nevertheless,
recent years have seen a dramatic ascendance of corruption on the
global agenda, what one analyst calls the "corruption eruption."3 The
growing salience of the issue of corruption is suggested by the results of
a Lexis-Nexis keyword search of the New York Times Index for the av
erage number of annual entries on corruption during six-year periods
starting in 1969.4 These data, presented in Table 1, show that sensitivi
ties to corruption issues have indeed peaked in the most recent period.5
Increased media attention reflects and reinforces increased public
awareness of the corruption issue.6 In addition, there appears be a
growing consensus against corruption. In other words, people are not
only more aware of the corruption issue, but they are also more judg
mental with respect to it. With few (though notable) exceptions, these
judgments are all in the direction of viewing corruption as detrimen
tal, "as one of the world's greatest scourges."7
The evidence is compelling. In the first place, the long-standing
taboo precluding public criticism of corruption has begun to crumble.
A recent example has been the scandal?and its worldwide repercus
sions?involving the International Olympic Committee (IOC) decision
to grant the 2002 winter games to Salt Lake City. This scandal is espe
cially indicative of the pervasive preoccupation with corruption inas
much as such practices involving the IOC have not captured worldwide
attention in the past even though they are not new. Until now, the IOC
has been virtually a world government unto itself and one whose
Table 1 Average Annual Entries on Corruption in the New York Times Index
for Recent Six-Year Periods
Period Average Annual Entries
1969-1974 357
1975-1980 245
1981-1986 302
1987-1992 402
1993-1998 578
Hongying Wang et) James N. Rosenau 27
authority and autonomy have not been seriously challenged.8 Another

recent scandal resulted in the mass resignation of the commissioners of
the European Commission. This was precipitated by a highly critical
self-study that the commission undertook in response to widespread
criticism and that was subsequently interpreted as evidence of grow
ing tendencies toward democracy in the European Union.9
Second, the normative changes that have brought corruption to the
top of the global agenda are also evident in national politics in many
countries. Heightened public awareness and abhorrence has served to
politicize criticism of corruption. In a growing number of countries,
political oppositions have used corruption issues to challenge sitting
governments. As one inquiry puts it,
In less than a half-decade, the worldwide backlash against corruption

has swept like a firestorm across the global political landscape. Gov
ernments have fallen. Longtime ruling parties have been hounded
from office. Presidents, prime ministers, parliamentarians, and once
mighty corporate chieftains have been grilled by prosecutors and
herded into the docket. Italy, France, Japan, South Korea, India, Mex
ico, Colombia, Brazil, South Africa: no region, and hardly any coun
try, has been immune.10
As of late 1999, major stories had surfaced about alleged corruption by

top political leaders of Germany and Israel and high-level cases in China.
Third, at the international level, the normative tide against corrup
tion has manifested itself in a variety of ways. The International Anti
Corruption Conference (IACC), first convened in 1983, was originally a
forum for cooperation in international law enforcement. It has subse
quently become increasingly focused on fighting corruption. Meeting
every two years, the conference brings together practitioners and academ
ics to exchange ideas and information about the damage corruption can
cause and ways to reduce it. In 1997, the eighth conference, comprising
over 1,000 citizens drawn from ninety-three countries, convened in Peru
and adopted the Lima Declaration, a document that consists of more than
forty clauses specifying actions to be taken. The declaration was billed as
representing "the global community's first attempt to articulate a broad
strategy for the combat of corruption, at the international and national lev
els, in all sectors and with the participation and cooperation of all walks of
life."11 In 1999, the ninth conference convened in Durban, South Africa,
with 1,600 participants from 135 countries. The delegates declared cor
ruption to be "one of the most debilitating legacies of the twentieth cen
tury" and reiterated their commitment to fighting corruption.12
The momentum?also designated as "a gathering posse"13?favor
ing efforts to curb corruption on a global scale has also swept through
international economic organizations. While the World Bank, the
International Monetary Fund (IMF), and the World Trade Organization

(WTO) used to be silent on the issue, they too have lately undergone a
change. James Wolfensohn, president of the World Bank, has made
prevention of corruption a cornerstone of his policymaking and his
speeches delivered at each year's annual meeting.14 In 1997, the World
Bank produced an anticorruption initiative that laid down new guide
lines for the granting of project funds.15 Two years later, Wolfensohn
reiterated his commitment to anticorruption policies in a memorandum
to the board, management, and staff of the World Bank Group:
While building an effective government framework is difficult, it will

become impossible if there is corruption which is the single most cor
rosive aspect of development and must be fought systematically at all
levels. Particularly it must start with a vigorous commitment from the
leadership to fight corruption on all levels, with initiative both to pre
vent it from happening and a system for finding and punishing
wrongdoers where corruption exists. The lead must come from the
top and efforts must be persistent and unyielding.16
Likewise, Michel Camdessus, until recently chairman of the IMF,

has been outspoken on the corruption issue.17 The WTO has launched
talks on proposals to combat bribery by increasing transparency in
public procurement.18 The United Nations General Assembly; the Eu
ropean Union; the G-7; the Inter-American, European, and Asian De
velopment Banks; the Asia-Pacific Economic Cooperation Forum; the
Global Coalition for Africa; the Organization of American States; the
International Chamber of Commerce; the World Economic Forum; the
Open Society Institute; and the Interparliamentary Union have made
similar additions to the accelerating momentum. Most significantly, in
1997, the Organization for Economic Cooperation and Development
(OECD) adopted an antibribery convention that was signed by its
twenty-nine member countries and five other countries. The convention
entered into force in February 1999. As of that date, nineteen nations
had ratified the antibribery pact.
In short, over the last several years corruption has quickly become a
new global issue area, characterized by increased public awareness and
emerging worldwide norms. This being the case, it is useful to explore
some structural changes that may have contributed to this development.
Structural Changes
One plausible explanation for corruption as an issue of global gover

nance is that corrupt practices have actually increased, thus provoking
Hongying Wang &) James N. Rosenau 29
a greater sensitivity to them and a greater readiness to condemn them.

Of course, given the covert nature of corruption, there is no easy and
reliable way to determine if this is indeed the case. It is almost impos
sible to track petty corruption that facilitates or "greases" the working
of bureaucracies (and is measured, say, by transactions of a few hun
dred dollars).19 On the other hand, according to anecdotal evidence,
"grand" corruption (measured on the scale of thousands and millions of
dollars) appears to have indeed increased.20
The World Bank's chief procurement officer, for instance, contends
that "economic development brings more money into play" and, as a
consequence, "corruption has been going up geometrically over the
past ten years."21 One observer notes that, "though 'commissions' or
kickbacks of 5 percent used to be common in international business,
requests for payments of 10-15 percent of contract value are on the
rise, with some recent reports of demands for commissions of 20-30
percent."22 Another cites businesspeople as reporting that the going
rate for bribes has soared, such that "'Mr. 10 percent' has ballooned
into 'Mr. 30 percent' in many countries."23 Similarly, "Italian business
people, imprisoned for corruption in the clean-up that started in Milan
in 1992, blamed extortion by politicians for the error of their ways and
pointed out that an average 7 percent kickback fee in the '70s had
grown to 20 percent in the greedy 1990s."24
Still another observer, the chairman of the board of directors of
Transparency International, Peter Eigen, estimates that in the last
twenty years corruption has become systemic in many parts of the
world inasmuch as people consider it a natural proclivity.25 The World
Bank estimates that at least $80 billion is paid as bribes in international
business transactions every year (compared with legitimate invest
ments of about $180 billion).26 The U.S. Security and Exchange Com
mission's enforcement director asserts that, despite his country's For
eign Corrupt Practices Act (FCPA), bribery by U.S. firms of foreign
officials "may be surfacing as a significant problem for the first time in
twenty years."27
A main reason why corrupt practices may be increasing can be
found in the processes of economic reform in countries such as China
and Russia, which, having seen their economies formerly governed by
a centralized plan, are now adjusting to the creation of mixed econ
omies. Under these circumstances, the combination of market mecha
nisms and government intervention provides unprecedented incentives
and opportunities for corruption.28 Recent economic booms in other
emerging markets, such as those of Mexico, Brazil, Indonesia, and
Malaysia, have occurred without adequate regulation and thus also fos
tered increasing business-related corruption.29
Other sources of possible increases in corruption derive from a

number of aspects of economic globalization. As growing numbers of
companies from Northern industrialized countries expand their opera
tions into developing countries, where the monitoring and regulative
framework tends to be less developed, they are subjected to greater
temptations to engage in practices not allowed at home. The digitali
zation of international finance and the proliferation of strategic busi
ness alliances accompanying globalization are other reasons why cor
ruption may be increasing: it is technically much easier than ever
before to launder and dispose of the gains harvested through corrupt
practices.30
The changes in international political structure may also have con
tributed to the newly gained salience of corruption on the global
agenda. In the first place, the collapse of the Soviet Union has meant
there is no longer any strategic rationale for the United States and other
Western nations to back corrupt governments. Governments in the
North are more willing to challenge former allies in the developing
world on grounds ranging from human rights to corruption.
Second, the failure of socialism has led to the apparent global tri
umph of market capitalism. Getting the state out of the economy seems
to be the order of the day. The fight against corruption by reducing
government discretion and enhancing the role of market competition
is part of the Zeitgeist of economic liberalization. International eco
nomic organizations, such as the World Bank and IMF, used to toler
ate corruption because they saw the state as agents of development,
and state intervention in the economy inevitably led to corruption.31
Even today, TI and other agencies rank the five largest national clients
of the World Bank among the ten most corrupt countries. However,
with the advance of the private sector in economic development, inter
national economic organizations are less hesitant to oppose corruption.
Finally, the rising tide of political liberalization and democratiza
tion means more and more media freedom in countries around the
world. In this new and more tolerant political atmosphere, the press has
been able to investigate and report on corruption with unprecedented
freedom.
Transparency International
Issues do not automatically fall within the scope of global governance.

Their ascendance on the global agenda and the formation of norms
governing the issues requires idea and organizational entrepreneurs.
Recently, scholars of international relations have come to stress the
role of norms in shaping behaviors. A growing number of studies have

come out on the agents and processes of norm and policy diffusion.32
Heightened sensitivity and emerging norms with respect to corrup
tion can be attributed to the work of many actors. Governments, inter
governmental organizations (IGOs), NGOs, and transnational advocacy
networks have all contributed to the momentum sustaining normative
diffusion. In this welter of agents and processes, one agent stands out
as the only transnational advocacy network that is solely dedicated
to the fight against corruption, namely, TI, a transnational network
founded in 1993. During TI's eight-year existence, the world has seen
a dramatic rise in the salience of corruption issues. While TI has not
been the source of change, it has been an important agent of change. Or
to put it differently, TI cannot be classified as an independent variable,
but it has made a difference as an intervening variable.
Mission, Organization, and Activities

TI defines its mission succinctly: "To curb corruption by mobilizing a
global coalition to promote and strengthen international and national
integrity systems."33 TI seeks to do so by encouraging governments to
establish and implement effective laws, policies, and anticorruption
programs. During the present stage, its focus is on increasing the trans
parency and accountability of government operations, especially gov
ernment procurements, and changing the public's moral and ethical at
titude. Later on, TI plans to promote reforms of substantive programs
and government structures. These include measures that minimize the
discretionary power of public officials, strengthen autonomous over
sight mechanisms, reduce conflicts of interest, and increase public su
pervision of the government.
Organizationally, TI consists of an international secretariat in
Berlin and an ever expanding number of national chapters (either es
tablished or in formation)?from some fifty in 1995 to more than a
hundred in 2000. The central governing body of TI is the board of di
rectors, which is elected by representatives of the national chapters at
the annual meeting. Members of the board include lawyers, consul
tants, business executives, and former government officials from a
number of countries. TI also has an advisory council of prominent in
dividuals from different parts of the world. The council advises the
board of directors and provides practical assistance for TFs programs.
Each component of TI plays an active role in accomplishing the
mission of fighting corruption. Individuals and organizations that
pledge to abide by and work for the principles of TI make up the na
tional chapters. Accredited by the board of directors and supported by
the international secretariat, they engage in anticorruption activities in

their respective home countries. A major part of their work is to raise
public awareness of the problems posed by corruption. They inform the
public on the scale and damage of corruption through workshops and
conferences, educational programs, mass media, and the Internet, as
well as through their newsletters and bulletins.
In addition, they try to influence the attitude and behavior of gov
ernment officials and businesses at the center of corrupt practices. TI
national chapters everywhere seek to engage governments and compa
nies in the fight against corruption, but their emphasis varies. The na
tional chapters in developing countries often focus on alerting govern
ments to the costs of corruption to national economic development and
on providing expertise on how to have TPs principles of transparency
and accountability incorporated into laws and regulations. The national
chapters in developed countries, on the other hand, concentrate on lob
bying governments to endorse and ratify international agreements
aimed at controlling corruption. They also try to persuade and assist
companies to free themselves from corrupt business practices.
Finally, as part of TPs holistic approach to corruption, the national
chapters actively engage in building networks and coalitions. Although
the national chapters of TI are independent, self-financed, and develop
their own programs, they stay in close touch with one another. For in
stance, the national chapters in developed countries often assist with
the launching of national chapters in developing countries and provide
the latter with information and expertise. National chapters faced with
similar conditions also try to coordinate anticorruption strategies with
one another. In 1996, the national chapters of Latin America and the
Caribbean formed a regional chapter to enhance regional cooperation.
Furthermore, TI national chapters also establish alliances with other
NGOs, such as churches and human rights organizations, whose goals
overlap with those of TI.
Besides the national chapters, TPs board of directors, advisory
council, and its staff organization?the international secretariat?are
also actively engaged in the efforts to promote transparency and to
change public attitudes toward corruption. Members of the board of di
rectors and advisory council lend their support to the national chapters
by visiting their countries and participating in their events. In addition,
they have been particularly effective in publicizing TI and its positions
in a number of highly visible ways, including speaking at national and
international forums, participating in media events, writing for jour
nalistic as well as scholarly publications, and seeking dialogues with
national and international leaders.
The international secretariat has been especially important as a

center for the worldwide fight against corruption. First, it is a vital
source of information and support for national and regional chapters. It
sends delegations to help with the launching of national chapters and
provides national chapters with information and other types of assis
tance with their ongoing programs. Second, the international secretariat
prepares and updates the TI Source Book, which provides a standard
reference point for reformers, describes practical steps in each sector,
and contains best-practice documentation. First published in English in
1996, the TI Source Book has been translated into many languages and
adapted to the specific conditions of different regions. It has been con
stantly updated to provide valuable guidance for system reforms
against corruption. Third, the international secretariat maintains the TI
database, which serves as an international information source on cor
ruption, good governance, and economic crimes. The database has
about 15,000 documents, ranging from short newspaper pieces to volu
minous reports. Providing such information to the public is a major
component of TFs strategy to change attitudes toward corruption. Fi
nally, the staff of the international secretariat promotes publicity for TI
by publishing annual reports, newsletters, and other publications, as
well as by interacting with the media. It also maintains contact with the
general public by answering inquiries and maintaining a website.
The most visible undertaking of TI is perhaps its Corruption Percep
tion Index (CPI). Issued annually since 1995, it ranks countries in terms
of their perceived degree of corruption. As TI is careful to point out, the
CPI is not an objective measurement of corruption in different coun
tries.34 Rather, it is based on a number of respected polls and is, in effect,
a poll of polls. It reflects the perceptions and opinions of people working
with multinational corporations and international institutions.35 But per
ception is powerful in itself. As Tunku Aziz, the chairman of TI's
Malaysian chapter, points out, countries facing the greatest economic
turmoil today are among those perceived by the international business
community to be the most corrupt: "If the lack of confidence in the way
we manage our economic affairs is what is causing all the problems, the
common sense thing to do is to reverse at once the negative foreign and
Malaysian public perceptions about our national integrity."36
Strategies
Thus far, TI appears to have been very successful. Jeremy Pope, TI's ex
ecutive director, recalls that "in the early 1990s, the topic of corruption
was simply not addressed in polite company."37 In 1998, TI president
Peter Eigen took note of the worldwide momentum toward greater sen
sitivity to corruption issues by stressing TPs growth: "If today our
movement seems at times to be just a trifle breathless, it is because we
have traveled such a long distance in such a short space of time. . . .
Quite suddenly, from being a very small office we have acquired a crit
ical mass."38 TPs budgetary income increased from $582,441.39 in
1995 to $1,114,834.26 in 1997.39 TPs effectiveness owes much to its
strategies.
Framing the issue. TI has been careful in its framing of the corruption
issue. First, it relates the fight against corruption to a number of issues
already well established on the global agenda. TPs official mission state
ment portrays the movement against corruption as humanitarian, demo
cratic, ethical, and practical.40 In the words of a member of TI-USA,
We are talking about more than scandals. . . . Corruption has become

a crosscutting issue with the potential to dissipate the dividends of
the end of the Cold War: (1) the consolidation of democracy, political
stability, and respect for the rule of law; (2) effective development;
and (3) the expansion of open, competitive markets.41
Similarly, according to another active member in the TI circle, cor

ruption "is no longer seen as principally an ethical issue, subject to the
vagaries of cultural relativism. Increasingly, it has become an eco
nomic development issue, a competitiveness issue and an issue of po
litical accountability."42
TI emphasizes somewhat different aspects of corruption to maxi
mize support from different actors. For instance, when TI sought start
up funding from the World Bank, its founders argued that the Bank
should address the corruption problem because it was a fiduciary issue
(the Bank has a duty to its funders to ensure proper application of loan
moneys). It was also an economic issue (corruption distorts project se
lection and decisions thereafter) and a legal issue (if the Bank lends
money knowing it was being stolen by the borrowing government, then
debts to the successor to that government may be void for illegality).43
Framing the issue of corruption this way, rather than simply as an eth
ical and moral problem, made it easier to generate support from inter
national economic organizations such as the World Bank.
In its dialogues with state governments, TI stresses the fight
against corruption as part of economic development. After the Cold
War, in the absence of pressing security threats, governments every
where are more dependent than ever on delivering economic growth to
shore up their own legitimacy.44 Citing scholarly research on the sub
ject, TI argues that corruption is a major stumbling block for economic
development in developing countries.45 The success of TI and others in

framing corruption as a development issue is remarkable given that it
was not long ago that many economists argued that corruption could
actually facilitate economic development.46 For instance, it was rea
soned that corrupt practices promote the provision of public goods by
reducing delays and avoiding burdensome regulations and taxes.47
They offset the inefficiencies of communist or hierarchical systems.48
They offer incentives for bureaucrats to accede to market-oriented re
forms.49 They may improve allocative efficiency.50 Not only does cor
ruption serve the interest of the agents, it may be beneficial to the prin
cipal as well.51 In recent years, as the scale of corruption has increased
everywhere in the world, more and more economists have come to
argue the opposite view?that corruption inhibits development.52 TPs
position is firmly in this camp.
According to David Fleisher, president of TI-Brazil, corruption in
Brazil increases the cost of public projects by between 20 and 40 per
cent.53 Similar estimates abound elsewhere. In South Africa, the oppo
sition National Party points out that corruption cost the taxpayer some
where between 13.5 and 20 billion rand in the past three years.54 The
Asian economic recession in the aftermath of the financial crisis in
1997 seems to have added to the credibility of the argument that cor
ruption is bad for economic development. Most analysts blame the cri
sis on "crony capitalism," of which corruption is a major aspect. One
of the lessons for Asian countries is the importance of separating busi
ness from government and establishing a rule-of-law system.55
The politics of shame. TFs annual publication of the CPI generates a

great deal of media coverage, which brings public attention to the issue
of corruption, as well as to TI itself. Governments around the world are
sensitive to their standing on the CPI. Understandably, governments of
countries that are ranked low (meaning perceived to be corrupt) are
critical of TI. For instance, in 1998, Cameroon was ranked the lowest
on the CPI. The government of Cameroon issued a statement vehe
mently condemning the ranking.56 President Menem of Argentina,
which ranked sixty-first out of eight-five countries, also rejected TFs
Index, saying its findings were politically motivated.57 However,
whether they like it or not, governments all over the world pay atten
tion to their ranking.58
Co-optation. The politics of shame aside, most of the time TI works

with, rather than against, powerful actors. First, TI specifies its mission
as one of gradually changing national and international systems so that
they become more transparent and less conducive to corruption. It
stays away from exposing specific cases of corruption. The national

chapters are urged to observe TPs guiding principles of noninvestiga
tive work and independence from government, commercial, and parti
san political interests. Thus, TI tends not to be seen as threatening any
government, company, or individual.
The national chapters cooperate with national governments. For in
stance, they share information and expertise with governmental anti
corruption agencies and education organizations. Tunku Aziz, chairman
of TI-Malaysia points out, "It is in fact more beneficial if we use
persuasion and present ourselves as an ally, rather than if we force con
frontation."59 The same is true of TPs approach to international organ
izations. It has patiently lobbied major international economic organi
zations to incorporate the corruption issue in their missions. TI played
an important role in assisting the OECD adoption of the 1997 anti
bribery convention. Since then, various national chapters have been
pushing for their governments to ratify the convention. TI has also
been instrumental in encouraging the World Bank and IMF to take a
stand against corruption. Now it is working hard on lobbying the WTO
to do the same. TPs approach of co-optation also consists of dialogues
with "the enemy." In order to win over corporations that have an ap
palling record of bribery, TI has had to conscientiously resist almost
overwhelming urges to denounce corporate conduct to the press.60
Political sensitivity. TI has been very careful to appear neutral and

noninterventionist. All the national chapters are autonomous and are
financially and institutionally independent. TI has been especially sen
sitive to developing countries' suspicion and hostility toward foreign
imposition. Many in the developing world are resentful of Western por
trayals of corruption as a problem of developing countries. For in
stance, Prime Minister Mahathir of Malaysia claims that "we can't take
bribes unless you offer them."61 In response, Eigen issues a warning
against focusing on corruption in the developing world: "Corruption is
perceived to be greatest there, but I urge the public to recognize that a
large share of the corruption is the explicit product of multinational
corporations, headquartered in the leading industrialized countries,
using massive bribery and kickbacks to buy contracts in the developing
world and the countries in transition."62 Now TI is trying to develop a
bribery-propensity index that would evaluate which countries are home
to "bribe-paying corporations."63
Institutional innovation. TPs success is related to its ability to provide

innovative institutional mechanisms that facilitate the fight against cor
ruption. For instance, as TI has found out, a major source of resistance
to the movement against corruption comes from the North. While it is
Hongying Wang e? James N. Rosenau 37
in the interest of many of the companies from the North not to have to
pay bribes, they are afraid that if they refuse to pay bribes, they will
lose contracts and jobs to their competitors.64 This is a typical case of
Prisoner's Dilemma. TI's "islands of integrity" model offers a useful
solution to this dilemma.
This model is designed to curb corruption in a single market with
a limited number of competitors. It is most applicable to large, gov
ernment-funded infrastructure projects, where corruption has been the
most serious.65 Since its inception in 1993, the model has been used in
a few projects in Latin America. Recently, it has been endorsed by a
number of national and local governments in Africa as well. The model
also has the support of the World Bank and a number of large compa
nies from developed countries.
The islands of integrity model is designed to help governments and
companies refrain from corruption. It requires that all applicants for a
public tender and the government that issues it sign a pact that obliges
all competitors to refrain from corrupt practices. If the agreement is vi
olated, the violators are subject to sanctions, such as loss of contract,
liability for damages (to the government and the competing bidders),
and forfeiture of the bid security. Companies engaging in corruption
can also be barred from future government business.66 A related
method with which the national chapters hope to influence government
and business behaviors is to accredit government agencies and compa
nies that refrain from corrupt practices.
Networking. TI cooperates and networks with other international fo

rums and organizations whose primary mission is other than that of
fighting corruption, but who make useful allies. As previously noted,
TI has also established ties with a number of other IGOs and NGOs.
For instance, TI has worked closely with the World Bank. The IACC,
which has convened every two years since 1983, established a council
to coordinate the conferences in 1996, with TI as its secretariat. TI's
principal task is to provide advice and assistance to the host of each
IACC conference. Most significantly, TI has supported and assisted the
OECD with its efforts to curb international corruption, particularly the
OECD antibribery convention of December 1997. Through its affilia
tion with these other organizations, TI has been able to further its reach
and influence in the world.
Comparisons
TI's efforts are part of the larger phenomenon of transnational advocacy.

TI shares some of the common characteristics of transnational activist
networks. In a recent study of transnational activist networks for

human rights, women's rights, and environmental protection, Margaret
Keck and Kathryn Sikkink describe a number of characteristics of
these networks, some of which characterize TI.67 Like the networks ac
tive in a number of other areas, TI is also characterized by "principled
ideas, ... the creative use of information, and the employment ... of
sophisticated political strategies in targeting their campaigns."68 Simi
larly, TI is like the other networks in that it is a form of "organization
characterized by voluntary, reciprocal, and horizontal patterns of com
munication and exchange . . . [designed] to promote causes, principled
ideas, and norms."69 Nor are these the only similarities. Consistent
with the activities of TI, and especially with its compilation and dis
semination of the CPI, the other advocacy networks "seek ways to
bring issues to the public agenda by framing them in innovative
ways"70 and "by promoting change by reporting facts."71
However, TI has not been discussed in the recent literature gener
ated by political scientists and sociologists on transnational advocacy
networks. None of the books on these subjects that we examined con
tain any references in their indices to corruption or TI.72 There is a
plentitude of journalistic reports and research articles in law journals
on the rising salience of and changing norms about corruption, but not
much literature exists in transnational and international politics. In ad
dition to the recency of this issue, it seems clear to us that some unique
characteristics of TI also account for this neglect.
But before we explore those differences, it is useful to briefly ob
serve several distinctive features of corruption?especially bribery?as
an issue area. First, corruption is covert. Parties to bribery at both the
giving and receiving ends extend themselves to keep their transactions
hidden from others. That such practices exist may be widely surmised
or known, but the specific acts of corruption are founded on secrecy
and vehemently denied when evidence of them is alleged. Second, cor
ruption often involves collusion between the relevant parties. Unlike
the cases of human rights abuse and environmental pollution, wherein
one side is victimized, the practices of corruption benefit all con
cerned. All those involved have reasons to maintain their collusion and
keep it secret. Third, corrupt practices are committed by widely dis
persed actors rather than by large collectivities. Unlike the targets of
those who rail against violations of human rights or the environment,
those who seek to expose corruption must focus on particular individ
uals whose dispersion within a system is never clear or concentrated.
These characteristics do not make opposition to corruption con
ducive to forming a social movement, which involves mass mobilization
and sustained mass participation, or to a transnational activist network
based on linkages with grassroots organizations.73 Although TI's liter

ature makes frequent references to "our movement," a close reading of
its fine print reveals otherwise. Its components consist of established or
fledgling chapters of elites in over ninety countries, as well as both for
mal and informal links to the world's major intergovernmental and
nongovernmental organizations. It is a network of like-minded elites
around the world.
There are at least two reasons why TI is neither a social movement
nor a transnational activist network closely linked with grassroots or
ganizations. First, according to Keck and Sikkink, activist networks
that base their campaigns on "short and clear" causal chains and that
can galvanize support by images of bodily damage, especially to the
vulnerable members of the population, are likely to succeed.74 But nei
ther of these is easily done regarding corruption. Instead, given the
covert nature of corruption, the collusion involved, and the absence of
any obvious and sensational victims, it is hard to demonstrate the
causal chains of corruption75 and to pinpoint corruption's conse
quences.76 Thus, it is extremely difficult to mobilize mass support to
focus on the fight against corruption. While people are aware and re
sentful of corruption, they are not readily responsive to calls for col
lective action against it.
Second, the covert and dispersed nature of corruption, and thus the
difficulty of measuring any progress in its reduction, indicates that it is
hard for potential participants to know that they have made a differ
ence; and yet this knowledge is the lifeblood of any social movement.
In the corruption issue area, in short, the logic of large-scale collective
action breaks down.
Unlike activist networks that facilitate and depend on bottom-up
processes, TI makes clear that it is interested in a different route to
change. TI enlists the energies of leaders of corporations, national gov
ernments, NGOs, and international agencies. It works hard at forming
links among these elites and is not particularly concerned about in
cluding activists who do not hold top organizational positions. In the
previously cited words of Wolfensohn, fighting against corruption re
quires that "the lead must come from the top."
Another related distinction separates TI from other transnational
activist networks. Most activist networks engage in disruptive activi
ties and challenge traditional notions of sovereignty.77 But neither is an
orientation of TI. On the contrary, while most networks issue reports
criticizing governments, TI practices "quiet diplomacy" in an effort to
win support from governments and companies whose policies it hopes
to change and, therefore, does not investigate or even expose reports of
bribery.78 In other words, TI practices the politics of co-optation rather
than confrontation. One possible explanation may be that the covert na

ture of corruption and the dispersion of its targets make it difficult to
tackle the issue by confrontational strategies such as mass rallies, sit
ins, and letter-writing campaigns. These tactics simply do not have
much potential for solving the problem.
Conclusion
In sum, we have noted the emergence of corruption as an issue of

global governance in the last several years, as indicated by the rising
sensitivity and emerging norms with respect to corruption on a global
scale. We have focused our attention on TI as an agent of change. We
have presented the work of TI as an elite transnational advocacy net
work and analyzed the strategies that have contributed to its success.
Finally, we have provided some comparisons between TI and other
types of transnational networks. As stated at the outset, it is our hope
that this case study will add to our understanding of the role of idea
and organization entrepreneurs in setting the global agenda and creat
ing global norms.
But we end with a few words of caution. First, successful as TI has
been in promoting normative change in opposition to corruption, its fu
ture is far from clear. It is one thing to raise awareness of and senti
ment against corruption, but quite another to reduce the practice of cor
ruption. For instance, on the one hand, many companies are drafting
codes of conduct and setting up hotlines that offer employees advice on
ethical questions.79 On the other hand, many of them continue to play
the bribery game. Indeed, for all their complaints about the constraints
imposed by the FCPA, U.S. foreign investors do not seem to behave
much differently from counterparts abroad,80 or at least they turn out to
be no more or less inclined to do business in corrupt countries than
anyone else.81 The Council on Hemispheric Affairs, for example, criti
cizes the United States for not vigorously applying FCPA: "Between
1994 and 1996, the Justice Department investigated only eleven cases
and did not prosecute a single one. It is estimated that during this pe
riod there may have been hundreds, if not thousands, of instances of
U.S. business executives corrupting Latin American officials."82 A
major obstacle is the problem of collective action. TPs islands of in
tegrity model begins to tackle the problem on a limited scale, but the
piecemeal approach may fall short of freeing companies from the fear
that in complying with the new norms they would lose business to
competitors who continue to pay bribes.83 To draw any firm conclu
sions about the prospects for the global contest against corruption, we
need to let more time pass. At present, the picture remains obscure.
Second, idea and organizational entrepreneurs are important, as we

hope we have shown in the case of TI. Yet it would be misleading not
to point out that the cause of these entrepreneurs has a better chance
of success if it does not contradict the interests of powerful actors. TPs
success results in part from powerful supporters, particularly U.S.
based multinational corporations (MNCs).84 Frank Vogl, vice-chairman
of TI, explains that U.S.-based MNCs "are enormously concerned that
multinational corporations abroad have a competitive edge on them
because the foreign multinationals can pay bribes."85 The Foreign Cor
rupt Practices Act prohibits U.S. companies from doing so and crimi
nalizes bribery abroad. For years, U.S. companies have complained
that they have lost business to less scrupulous competitors from Europe
and elsewhere. According to sources from the U.S. Department of
Commerce, U.S. companies lost more than a hundred international
contracts valued at $45 billion in 1994 and 1995 as a result of
bribery.86 The Treasury estimates that U.S. corporations lose $30 bil
lion in contracts every year because of their inability to pay bribes.87
Experts agree that Latin officials are more frequently bribed by Euro
pean multinationals than by U.S. companies. General Electric, for in
stance, claims that it has lost major infrastructure deals to European
companies because of bribes.88
Other companies also suffer from corrupt practices. International
executives name corruption as one of the biggest obstacles to doing
business in less developed countries. A poll of Danish businesspeople
overseas revealed 74 percent had paid bribes to win contracts. The
problem is widespread and can account for up to 30 percent of a pro
ject's cost.89 In a way, companies operating in a corruption-ridden en
vironment are trapped in a game of Prisoner's Dilemma. TI's islands of
integrity formula provides companies with a way out of the trap, and
they tend to be supportive of TI's efforts.
Third, a question that is not addressed here but forms the back
ground of our inquiry needs to be asked: Does it matter if an issue has
become one of global governance? What impacts may follow from the
growing awareness of and emerging norms against corruption glob
ally? While it is still too early to provide a conclusive answer, our pre
liminary sense is that corruption becoming an issue of global gover
nance may have a different impact on different actors. To put it simply,
the impact on companies is regulative rather than constitutive, and the
impact on governments is both regulative and constitutive. For private
companies that are competitive, the preference has always been a level
playing field. Once corruption becomes an issue of global governance,
it is easier for companies to get out of the trap of corruption. For private
companies that lack competitiveness, corruption is an important?and
sometimes the only?way to gain business opportunities. For them, the
impact of the new governance environment makes it difficult and

costly to engage in corruption. In both these cases, the new awareness
and norms against corruption do not change the actors' preferences.
For governments, however, the advent of corruption on the global
agenda is likely to have a significant impact on both their preferences
and their behavior. Given heightened public awareness of corruption as
an obstacle to economic development, and given the increasingly vocal
expression of concern about its detrimental consequences by the inter
national business community and international organizations, govern
ments are likely to reconsider their attitude toward corruption. Whereas
many of them used to be tolerant of corruption, they are now likely to
see corrupt practices as hurting their interests and therefore actively
crack down on corruption. In other words, TI has been able to make
governments reconceptualize the costs and benefits of corruption and
to take the issue of corruption seriously. In the words of Tunku Aziz,
chairman of TI-Malaysia, Malaysians need to "seriously consider the
urgent need to develop a national code of business ethics to regulate
business transactions . . . and to combat extortion and bribery. . . . The
globalization of our economy means one thing, that is the rules are no
longer ours to lay down. We either play by the new global rules which
demand greater transparency and accountability than we were used to
in the past, or remain spectators."90 ?
Notes
Hongying Wang is assistant professor of political science at the Maxwell

School of Syracuse University. Her book Weak State, Strong Networks will be
published in 2001 by Oxford University Press. James N. Rosenau is university
professor of international affairs at George Washington University. His books
include Along the Domestic-Foreign Frontier (1997) and Turbulence in World
Politics (1990).
1. Michael Johnston, "The Search for Definitions: The Vitality of Politics
and the Issue of Corruption," International Social Science Journal 149 (Septem
ber 1996): 321-336. Ah example of an extensive definitional effort is provided by
one observer who sought to design a "culturally neutral" definition: "Corruption
is any attempt, whether successful or not, to persuade someone in a position of
responsibility to make a decision or recommendation on any grounds other than
the intrinsic merits of the case with a view to the advantage or advancement of
him- or herself or another person or group to which he or she is linked through
personal commitment, obligation, or employment, or individual, professional, or
group loyalty." A. W. Cragg, "Business, Globalization, and the Logic and Ethics
of Corruption," International Journal 53 (autumn 1998): 651.
2. Kimberly Ann Elliott, "Corruption as an International Policy Problem:
Overview and Recommendations," in Elliott, ed., Corruption and the Global
Hongying Wang et) fames N. Rosenau 43
Economy (Washington, D.C.: Institute for International Economics, 1997), pp.

178-179.
3. Mois?s Nairn, 'The Corruption Eruption," Brown Journal of World Af
fairs 2 (summer 1995): 245-261.
4. The New York Times, along with the U.S. president, are considered
central to setting the media agenda for national issues in the United States. See
John W. Dearing and Everett M. Rogers, Agenda Setting (Thousand Oaks,
Calif.: Sage, 1996), p. 25.
5. For comparable data and findings based on the Financial Times and
The Economist, see Patrick Glynn, Stephen J. Kobrin, and Mois?s Nairn, "The
Globalization of Corruption," in Elliott, Corruption and the Global Economy,
p. 21.
6. Media and public agendas are highly correlated, with the former tend
ing to shape the latter. See Dearing and Rogers, Agenda Setting, chap. 1. The
classic study in this area is Maxwell E. McComb and Donald L. Shaw, "The
Agenda-Setting Function of the Mass Media," Public Opinion Quarterly 36
(1972): 176-187.
7. Fred Hiatt, "Corruption Is Finally Getting the Attention It Needs," In
ternational Herald Tribune, 25 February 1999, p. 9.
8. Volker Rittberger and Henning Boekle, "The International Olympic
Committee: A World Government of Sport?" Law and State 56 (Tubingen,
Germany: Institute for Scientific Co-operation, 1997): 24-53.
9. See E. J. Dionne Jr., "Score One for the Media Snoops," Washington
Post, 26 March 1999, p. A33; and Marie Geoghegan-Quinn, "Discredited
Musketeers Were Right to Fall on Their Swords," Irish Times, 20 March 1999,
p. 14.
10. Glynn, Kobrin, and Nairn, "The Globalization of Corruption," p. 7.
11. "The Lima Declaration," reproduced in Combating Corruption: Are
Lasting Solutions Emerging? (Berlin: Transparency International, Annual Re
port, 1998), pp. 163-168.
12. Reported on Transparency International's official website online at
http://www.transparency.de.
13. John Brademas and Fritz Heimann, "Tackling International Corrup
tion: No Longer Taboo," Foreign Affairs 11 (September-October 1998): 20.
14. Ibid. See also Duncan Hughes, "Asian Corruption Going from Bad to
Worse," South China Morning Post, 22 September 1998, p. 6.
15. However, Wolfensohn was careful to point out that "it would be quite
wrong of us to come in like the police." See Trevor Royle, "Corruption Pays
Its Way Throughout the World," Scotland on Sunday, 4 May 1997, p. 21.
16. James D. Wolfensohn, "A Proposal for a Comprehensive Development
Framework (A Discussion Draft)" (photocopy, 21 January 1999), p. 10.
17. Lee Siew Hua, "Who's Who in the Graft League," Straits Times (Sin
gapore), 24 September 1998, p. 12.
18. John Mason and Guy de Jonqui?res, "Goodbye Mr. 10%," Financial
Times, 22 July 1997, p. 15.
19. Some even argue that petty corruption is not corruption at all: such "'pay
ments, which are made to get people to do or speed up what they should be doing
anyway,' get you 'what you're legally entitled to, not subverting the integrity of
decision-making at somebody else's expense.' Even the U.S. Foreign Corrupt
Practices Act (1997) permits these facilitating payments." The subquote is from
Jeremy Pope, in Anita van de Vliet, "Corruption Check," Corporate Location

(November-December 1995): 22.
20. Susan Rose-Ackerman, "Democracy and 'Grand' Corruption," Inter
national Social Science Journal 48 (September 1996): 365-380. See also Ack
erman, "Corruption and Development," paper presented at the annual Bank
Conference on Development Economics, Washington, D.C., 30 April-1 May
1997, pp. 8-10; George Moody-Stuart, "Grand Corruption in Third World De
velopment," Transparency International Working Paper, 1994; and Marta Stee
man, "Close Watch Urged on Corruption Law," The Dominion, 11 March
1999, p. 13.
21. Michelle Celarier, "The Search for the Smoking Gun," Euromoney
(September 1996): 50.
22. Frank Vogl, "Laying Corruption to Rest," Economic Reform Today, 18
July 1993.
23. This remark was made by Michael Wiehen of TI and quoted in Mason
and de Jonqui?res, "Goodbye Mr. 10%," p. 15.
24. Van de Vliet, "Corruption Check," p. 22.
25. "Eigen Fights the Corruption Monster," in New Straits Times (Malaysia),
9 September 1997, p. 1.
26. Ben Richardson, "SAR Wanted to Act on Corrupt Behavior of Busi
nessmen Abroad," South China Morning Post, 31 January 1999, p. 1.
27. William McLucas, quoted in Neil Roland, "U.S. Firm May Feel Need
to Bribe Overseas," Commission Appeal, 6 March 1997, p. B4.
28. On China, for example, see Julia Kwong, The Political Economy of
Corruption in China (Armonk, N.Y.: M. E. Sharpe, 1997); Barbara N. Sands,
"Decentralizing an Economy: The Role of Bureaucratic Corruption in China's
Economic Reforms," Public Choice 65 (April 1990): 85-91; Melanie Manion,
"Corruption by Design: Bribery in Chinese Enterprise Licensing," Journal of
Law, Economics, and Organization 12 (April 1996): 167-195; and David S. G.
Goodman, "Corruption in the PLA," in Gerald Segal and Richard H. Yang,
eds., Chinese Economic Reform: The Impact on Security (London: Routledge,
for IISS and the Chinese Council of Advanced Policy Studies, 1996), pp.
35-52. On Russia, see Britta Hillstrom, "Effects of Corruption on Democra
cies in Asia, Latin America, and Russia," Woodrow Wilson Center Report 8
(December 1996): 3-40; Federico Varese, "The Transition to the Market and
Corruption in Post-Soviet Russia," Political Studies 45, no. 3 (1997): 579
596; and Steven Lee Solnick, Stealing the State: Control and Collapse in So
viet Institutions (Cambridge: Harvard University Press, 1998).
29. The recent economic growth in Malaysia has its flip side. The boom
has necessitated an increase in administration, which beefs up the amount of
corruption as well as its scale. See Sharon Nelson, "Towards More Open Deal
ings," New Straits Times (Malaysia), 1 May 1997, p. 9. On Latin America, see
Juigi Manzetti and Charles H. Blake, "Market Reforms and Corruption in
Latin America: New Means for Old Ways," Review of International Political
Economy 3 (winter 1996): 662-697. For a discussion of the relationship be
tween corruption and market-oriented reforms in general, see Steven N. S.
Cheung, "A Simplistic General Equilibrium Theory of Corruption," in Con
temporary Economic Policy 14 (July 1996): 1-5; and Susanto Basu and David
Li, "Corruption and Reform," Department of Economics, University of Michi
gan, CREST Working Papers No. 94-14 (November 1994).
30. Glynn, Kobrin, and Nairn, "The Globalization of Corruption," p. 14.
31. According to one model, industrial policy promotes both corruption

and investment. Corruption is higher in countries pursuing active industrial pol
icy. See Alberto Ades and Rafael Di Telia, "National Champions and Corrup
tion: Some Unpleasant Interventionist Arithmetic," Economic Journal 107, no.
443 (July 1997): 1023-1042. Studies show that in Indonesia one-third of the
World Bank loans have been siphoned off by bureaucrats. Kastorius Sinaga,
"WB Loans Graft Needs to Be Curbed," Jakarta Post, 12 August 1997, p. 4.
32. The interest in norms is in part attributable to the influence of neo
institutional sociologists who study how normative environments shape the
structure and behavior of organizations and individuals. The most important
works in this field are those by John Meyer and his associates. See, for example,
W. Richard Scott, John W. Meyer, and associates, eds., Institutional Environment
and Organizations: Structural Complexity and Individualism (Thousand Oaks,
Calif.: Sage, 1994). A major problem with the sociological scholarship on norms
is that it has very little to say about the origins and dynamics of norms. See
Martha Finnemore, "Norms, Culture, and World Politics: Insights from Sociol
ogy's Institutionalism," International Organization 50 (spring 1996): 325-348.
Political scientists are now addressing this inadequacy by exploring the agents
and process of norm diffusion. See, for example, Martha Finnemore, National
Interests in International Society (Ithaca, N.Y.: Cornell University Press, 1996);
Margaret E. Keck and Kathryn Sikkink, Activists Beyond Borders: Advocacy
Networks in International Politics (Ithaca, N.Y.: Cornell University Press,
1997); Jacqui True and Michael Mintrom, "Transnational Policy Networks and
Policy Diffusion: The Case of Gender Mainstreaming," paper presented at the
American Political Science Association annual meeting, Atlanta, 1999.
33. "Mission Statement," in Combating Corruption, p. 9.
34. See, for example, Tan Sai Siong, "Corruption Perceptions Index
Should Carry Health Warning," Straits Times (Singapore), 8 June 1996.
35. For a discussion of the sources and interpretation of data presented
in the CPI, see Transparency International, The Fight Against Corruption,
chap. 6.
36. "Need for Greater Transparency," Business Times (Malaysia), 2 April
1998, p. 6.
37. Personal correspondence, 14 April 1999.
38. Peter Eigen, "Sustainable Strategies in Fighting Corruption: An Over
view," in Combating Corruption, pp. 12, 15.
39. These figures can be found in Combating Corruption, pp. 118-119.
40. TI home page online at www.transparency.de.
41. Nancy Zucker Boswell, "Building Effective Anticorruption Regimes:
A Public-Private Sector Partnership," paper presented at the annual meeting of
the American Society of International Law, Washington, D.C., 10 April 1997.
42. R. Michael Gadbaw, "International Anticorruption Initiatives: Today's
Fad or Tomorrow's New World?" paper presented at the annual meeting of the
American Society of International Law, Washington, D.C., 10 April 1997.
43. Personal correspondence with TI official, April 1999.
44. For example, during the recent meeting of the National People's Con
gress, President Jiang Zemin of China warned, "We must recognize the im
portance and urgency of cracking down on corruption from the point of view
of national survival." China News Agency, 5 March 1999.
45. TI 1997 report, pp. 10-11. The often cited article is Shang-jin Wei,
"How Taxing Is Corruption on International Investors?" National Bureau of
Economie Research Working Paper No. W6030, May 1997. Controlling for
other factors, Wei finds that corruption tends to discourage foreign direct in
vestment (FDI), in effect by acting as a tax on foreign business. From Singa
pore to Mexico, the marginal tax rate on foreign investment is raised by 20 per
cent. According to Peter Eigen, there is a tendency for countries with rampant
corruption to face difficulties in sustaining economic development "because
very often the wrong projects are chosen, not the ones which give the best price
and best product. Very often funds are not made available to schools, hospitals
and other services which are important to create a healthy and prosperous
society." Kang Siew Li, "KL's Anti-Graft Laws Lauded," Business Times
(Malaysia), 17 September 1998.
46. For a review and critique of the functionalist literature on corruption,
see Shahid M. Alam, "Anatomy of Corruption: An Approach to the Political
Economy of Development," American Journal of Economics and Sociology 48
(October 1989): 441-456.
47. Tyler Cowen, Amihai Glazer, and Henry McMillan, "Rent Seeking
Can Promote the Provision of Public Goods," Economics and Politics 6 (July
1994): 131-145.
48. Cheung, "A Simplistic General Equilibrium Theory of Corruption,"
pp. 1-5. Also see Gordon Tullock, "Corruption Theory and Practice," in Con
temporary Economic Policy 14 (July 1996): 6-13.
49. Basu and Li, "Corruption and Reform."
50. Francis T. Liu, "Three Aspects of Corruption," Contemporary Eco
nomic Policy 14 (July 1996): 26-29.
51. Trond E. Olsen and Gaute Trosvik, "Collusion and Renegotiation in
Hierarchies: A Case of Beneficial Corruption," International Economic Review
39 (May 1998): 413-438.
52. In addition to the study by Shang-jin Wei (note 46), see Oluwole
Owoye and Ibrahim Bendardaf, "The Macroeconomic Analysis of the Effects
of Corruption on Economic Growth of Developing Economies," Rivista Inter
nazionale de Scienze Economiche e Commerciali 43 (January-March 1996):
191-211; Paolo Mauro, "Corruption and Growth," Quarterly Journal of Eco
nomics 110, no. 3 (August 1995): 681-712; and M. Shahid Alam, "Anatomy of
Corruption: An Approach to the Political Economy of Underdevelopment,"
American Journal of Economics and Sociology 48 (October 1989): 441-456.
53. "Corruption in Brazil Raises Costs by Up to 40%," Gazeta Mercantil
Online, 18 September 1996.
54. Michael Hamlyn, "Opposition Urges Mandela to Act Against Corrup
tion," New Straits Times (Malaysia), 15 August 1997, p. 12.
55. "Corruption Related to Economic Crisis," Korean Herald, 9 February
1998.
56. "The Cameroon government condemns strongly the arrogance of certain
bodies that are in the pay of neo-colonial clusters of people at work to impede
the progress of our countries instead of supporting efforts and sacrifices made by
our people." Quoted in Barbara Crossette, "Europe Dominates Survey's Top 10
Least-Corrupt-Countries List," New York Times, 4 October 1998, p. 5.
57. "This is a subjective and partial study which is aimed at feeding the
political opposition's campaign against the government and renew their attacks
on the integrity and credibility of the country." Quoted in Beth Rubenstein,
"Corruption Taint Hurts Argentina's Trade Goals," Journal of Commerce, 9
October 1998, p. 4A.
Hongying Wang ?) James N. Rosenau 4-7
58. For instance, after TI issued the CPI for the first time in 1995, Singa
pore's prime minister, Goh Chok Tong, noted that "there is no reason why, in
terms of the honesty and integrity of our system, Singapore should be second
to any other country." See Susan Sim, "Corruption Index Based on 7 Polls of
Businessmen, Newsmen," Straits Times (Singapore), 26 August 1995, p. 2. In
the aftermath of the issuance of the 1997 CPI, opposition leader Lim Kit Siang
told the Malaysian government that by aggressively fighting corruption,
Malaysia's ranking in the CPI will improve. See "DAP: Give ACA Chief Back
His Old Powers," New Straits Times (Malaysia), 10 April 1997, p. 4.
59. Quoted in Sharon Nelson, "Towards More Open Dealings," New
Straits Times (Malaysia), 1 May 1997, p. 9.
60. Personal correspondence with TI official, April 1999.
61. Quoted in Trevor Royle, "Corruption Pays Its Way Throughout the
World," Scotland on Sunday (London), 4 May 1997, p. 21.
62. Quoted in Roger Boyes, "Britain Moves Higher in Bribery League,"
The Times (London), 1 August 1997.
63. Janet Guttsman, "Canada Among the Least Corrupt Countries,"
Toronto Star, 23 September 1998, p. D7. Indeed, in the fall of 1997, it was re
ported that TI issued a report stating that Belgium, Luxembourg, France, Italy,
the Netherlands, and South Korea are the most corrupting countries in the
world. This is analyzing corruption from the point of view of the corrupting
countries offering bribes to countries bidding for contracts. The least corrupt
ing countries are Australia, Malaysia, and Sweden. Gazeta Mercantil Online, 2
September 1997. TI executive director Jeremy Pope cautions that this report
was done by a TI researcher and the methodology was inherently flawed. Per
sonal correspondence, April 1999.
64. "Eigen Fights the Corruption Monster," New Straits Times (Malaysia),
9 September 1997, p. 1.
65. The level of corruption differs among different economic sectors.
George Moody-Stuart, chairman of TI-UK, ranks industries by the extent to
which he estimates they are prone to bribery?aircraft and defense, major in
dustrial goods, major civil works, supplies, and consultancy. See Michael
Prest, "$40bn Business Beset by Bribes and Kickbacks," The Observer, 22 Oc
tober 1995, p. 1. Defense sales are ideal for grand corruption because of their
size and secrecy. George Moody-Stuart, "Scope for Corruption in Arms
Trade," The Times (London), 26 February 1996. In many countries, construc
tion projects tend to be where corruption concentrates. For instance, according
to official reports, 63 percent of the more than 100,000 cases of corruption in
recent years have taken place in the construction sector (see China News Ser
vice, 6 March 1999).
66. For more details on this model, see Transparency International, The
Fight Against Corruption, chap. 4.
67. Keck and Sikkink, Activists Beyond Borders.
68. Ibid., p. 2.
69. Ibid., p. 8.
70. Ibid., p. 17.
71. Ibid., p. 19.
72. Enrique Larafia, Hank Johnston, and Joseph R. Gusfield, eds., New
Social Movements: From Ideology to Identity (Philadelphia: Temple University
Press, 1994); Keck and Sikkink, Activists Beyond Borders; Jackie Smith,
Charles Chatfield, and Ron Pagnucco, eds., Transnational Social Movements
and Global Politics: Solidarity Beyond the State (Syracuse: Syracuse Univer
sity Press, 1997); and David S. Meyer and Signey Tarrow, eds., The Social
Movement Society: Contentious Politics for a New Century (Lanham, Md.:
Rowman & Littlefield Publishers, 1998).
73. Social movements are not the same as transnational activist or advo
cacy networks. As Tarrow points out, "There is an important substantive dif
ference: activist networks are horizontal elite linkages in transnational space
with occasional organizational connections to grassroots social actors, while
transnational social movements are built on these social networks themselves."
Sidney Tarrow, "Does Internationalization Make Agents Freer?or Weaker?"
paper prepared for a workshop on European institutions and transnational con
tention, Cornell University, 5-6 February 1999, p. 7. Also see Tarrow, "Fish
nets, Internets, and Catnets: Globalization and Transnational Collective Ac
tion," in M. Hangan, L. Page Moch, and Wayne de Brake, eds., Challenging
Authority (Minneapolis: University of Minnesota Press, 1998), p. 237. The
phrase transnational advocacy network is used in Keck and Sikkink, Activists
Beyond Borders.
14. Keck and Sikkink, Activists Beyond Borders, pp. 27, 204-205.
75. See Paulo Mauro, "The Effects of Corruption on Growth, Investment,
and Government Expenditure: A Cross-Country Analysis," in K. A. Elliott
(ed.), Corruption and the Global Economy, p. 83.
76. Elliott, "Corruption as an International Policy Problem," p. 190.
77. Keck and Sikkink, Activists Beyond Borders, p. 35.
78. Raymond Bonner, "The World Business of Bribes: Quiet Battle Is
Joined," New York Times, 8 July 1996, p. A3.
79. Kerene Witcher, "A Bribe or Tip? A Dilemma," Asian Wall Street
Journal, 15 September 1997, p. AL
80. Shang-Jin Wei, "How Taxing Is Corruption on International In
vestors?" National Bureau of Economic Research Working Paper No. W6030,
May 1997.
81. Stephanie Flanders, "Clear Thinking on Corruption," Financial Times,
23 June 1997, p. 10.
82. Nancy Dunne, "U.S. Presses Drive Against Business Bribery," Finan
cial Times, 24 February 1999, p. 7.
83. Mason and de Jonqui?res, "Goodbye Mr. 10%," p. 15.
84. A review of TI's financial supporters reveals the importance of cor
porate donors, especially U.S. multinational corporations. Twenty-nine of the
seventy-three corporate donors are U.S. companies. See TI's home page at
www.transparency.de. Other sources of funding include multilateral groups,
such as the World Bank, the Asian Development Bank, the European Union,
the Inter-American Development Bank, and the UN Development Programme;
national development agencies such as the U.S. Information Agency, the U.S.
Agency for International Development, the French Ministry of Cooperation,
and the Swedish International Development Authority; and private foundations
such as the Asia Foundation, the Ford Foundation, the MacArthur Foundation,
the Rowntree Foundation, the Open Society Institute, and the Konrad-Ade
nauer Stiftung.
85. Russell Mokhiber, editor of Corporate Crime Reporter, letter to the
editor of the New York Times, 19 August 1995, section 1, p. 18.
86. Michael Hershman, "A Blow Against Bribery," Financial Times, 23
February 1998, p. 14.
Hongying Wang et? James N. Rosenau 49
87. Martin Dyckman, "Taking a Reading on Corruption Around the World,"

St. Petersburg Times, 11 October 1998, p. 3D.
88. Larry Luxner, "Rhetoric Exceeds Reality in Latin America's Anti
Corruption Effort," Journal of Commerce, 4 June 1998, p. 4A.
89. Ben Richardson and David Murphy, "Graft Battle Begins at Home,"
South China Morning Post, 31 January 1999, p. 3.
90. Quoted in Desmond Ngiam, "Call for Greater Transparency in Finan
cial Sector," New Straits Times (Malaysia), 2 April 1998, p. 19.

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Transparency International and Corruption as an Issue of Global Governance

Author(s): Hongying Wang and James N. Rosenau

Hongying Wang and James N. Rosenau

The globalization of economies, politics, and culture has broken

In the first part of the article we highlight the rise of corruption as

Emerging Global Governance of Corruption

Corruption is not easily defined. Some observers, persuaded that defin

as if these are so self-evident or overlapping that there is no need to

Period Average Annual Entries

authority and autonomy have not been seriously challenged.8 Another

In less than a half-decade, the worldwide backlash against corruption

As of late 1999, major stories had surfaced about alleged corruption by

International Monetary Fund (IMF), and the World Trade Organization

While building an effective government framework is difficult, it will

Likewise, Michel Camdessus, until recently chairman of the IMF,

One plausible explanation for corruption as an issue of global gover

a greater sensitivity to them and a greater readiness to condemn them.

Other sources of possible increases in corruption derive from a

Issues do not automatically fall within the scope of global governance.

role of norms in shaping behaviors. A growing number of studies have

Mission, Organization, and Activities

the international secretariat, they engage in anticorruption activities in

The international secretariat has been especially important as a

We are talking about more than scandals. . . . Corruption has become

Similarly, according to another active member in the TI circle, cor

development in developing countries.45 The success of TI and others in

The politics of shame. TFs annual publication of the CPI generates a

Co-optation. The politics of shame aside, most of the time TI works

stays away from exposing specific cases of corruption. The national

Political sensitivity. TI has been very careful to appear neutral and

Institutional innovation. TPs success is related to its ability to provide

Networking. TI cooperates and networks with other international fo

TI's efforts are part of the larger phenomenon of transnational advocacy.

networks. In a recent study of transnational activist networks for

based on linkages with grassroots organizations.73 Although TI's liter

than confrontation. One possible explanation may be that the covert na

In sum, we have noted the emergence of corruption as an issue of

Second, idea and organizational entrepreneurs are important, as we

impact of the new governance environment makes it difficult and

Hongying Wang is assistant professor of political science at the Maxwell

Economy (Washington, D.C.: Institute for International Economics, 1997), pp.

Jeremy Pope, in Anita van de Vliet, "Corruption Check," Corporate Location

31. According to one model, industrial policy promotes both corruption

87. Martin Dyckman, "Taking a Reading on Corruption Around the World,"

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